(The Center Square) – A conservative policy group is urging Missouri lawmakers to support Gov. Mike Kehoe’s proposal to eliminate the state’s personal income tax, arguing the state’s budget challenges come from spending growth rather than a lack of revenue.
The push comes as Kehoe has said scrapping Missouri’s individual income tax will be his top legislative priority in 2026. He has said any plan would need to be implemented responsibly without undercutting funding for public safety and other vital services.
“We think anytime Missourians can keep more of their money, it’s a good day for them,” Kehoe said last month.
Kehoe added that lawmakers should work with House and Senate leadership on a plan that protects essential government functions.
Advancing American Freedom Foundation circulated a memo to lawmakers Friday calling for the change.
“Missouri Governor Mike Kehoe has boldly called for zeroing out Missouri’s state income tax,” the memo, obtained exclusively by The Center Square, said. “State lawmakers should rally behind Gov. Kehoe to make this goal a reality. The time has come for Missouri to end its income tax and pursue tax policies that encourage rather than discourage work.”
Missouri collects about $9 billion each year in individual income taxes, accounting for nearly two-thirds of the state’s general revenue, according to the foundation. While the state ranks among the more competitive states for business income taxes, the group said Missouri’s top personal income tax rate remains relatively high and impacts entrepreneurs and pass-through businesses.
The foundation also argued that Missouri’s fiscal issues come from spending growth rather than a lack of revenue. It said state revenues increased significantly over the past decade, while expenditures grew at a much faster pace. That spending growth pace was quicker than the combined growth of population and inflation during the same period.
On a per-capita basis, Missouri spends more than several states that do not levy a personal income tax, including Texas and Florida, according to the group. Those states, the foundation said, offer examples of how governments can diversify their tax base while promoting economic growth and workforce participation.
Nine states currently operate without a personal income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming. Supporters of eliminating Missouri’s income tax argue that joining that group would improve the state’s competitiveness and attract workers and businesses.
Critics of the proposal have raised concerns about potential revenue losses. The Missouri Budget Project, which advocates for low-income residents, has warned that eliminating the income tax could significantly reduce state revenues and cause public service cuts.
Kehoe has previously said any proposal to eliminate the income tax would likely be phased in over multiple years. The governor has pitched the effort as a long-term goal aimed at improving affordability for residents while maintaining funding for core government functions.
Missouri’s 2026 legislative session will begin on Jan. 7, and lawmakers will start debating various tax policy proposals.
